Preparation for year ending Compliances

under the Companies Act, 2013

& Role of CS asInsolvency Professionals

under the Insolvency and Bankruptcy Code, 2016

Presented by

CS (Dr.) D.K. JainPracticing Company Secretary

At Indore Chapter of ICSI on 11.03.2017

Check Company’s Status

Check properly as at 31st March, 2017 Whether it will be;

• OPC, Private, Public, Specified Public Company or a

Listed Company (Small, Others, Top 100 or 500

listed Co., etc) ?

• If it is a Private Co., whether subsidiary (Material or

otherwise) of Public Co.?

• Holding, associate or Joint Venture?

• Whether Standalone or Consolidated Financial

Statement is required?

Note: that even in case where consolidated financial

statements are required, the Boards’ Report shall be

prepared on Standalone basis only.

Check applicability of various

provisions based on the

Company’s Status

Check properly as at 31st March, 2017;

• Turnover;

• Paid up share capital

• Profit before Tax

• Borrowings,

• Net Worth at the end of the financial

year 2016 and 2017.

Check applicability of…

Check properly about:

• Interim dividend, if any, is paid or final dividend is

proposed to be declared and paid?

• CSR requirement u/s 135, if yes, its compliance?

• Audit Committee, if yes constitution of the

Committee as per CA-2013 and SEBI (LODR)

• Internal Audit, if yes, has appointed?

• Secretarial Audit, if yes, has appointed?

• Risk Management Committee, if yes, its

constitution?

• Women Director, if yes status of compliance.

Check applicability……

Check properly about:

• Independent Directors and related compliance

under CA-2013 & SEBI (LODR)

• Cost Records/Cost Auditors & Cost Audit Report

• Requirement of Form MGT-8 with Form MGT-7

• Requirement for transfer of Unpaid/unclaimed

amount to IEPF

• Requirement for filing of Form IEPF-3 within 30

days of end of the FY for estimated amount to be

transferred to IEPF in 2017-18

• Requirement for filing of various Forms to RoC

and actual filing made

Meetings – Board of Directors

Check properly in relation to Board Meetings:

• Nos of Board Meetings held in 2016-17 and gap between 2

BMs.

• Every director has attended at least 1 meeting of the Board

• Has complied with the requirement of SS-1 as applicable.

• All the mandatory items has been considered by the Board

• Signature for attendance of directors and invitees and evidence

for service of notice is available

• Resolution passed by circulations were noted in Board Minutes

• Minutes were properly circulated, entered in Minute Book &

Signed by the Chairman with date

• Approval of the RPT, Investments, appointment of directors,

KMPs, etc., disclosure of interest, non disqualification of

directors have been considered and recorded in the Minutes

Meetings – Audit Committee

Check properly in relation to AC Meetings:

• Nos of ACM held and gap between 2 ACMs.

• Constitution of the Audit Committee as per CA & LODR

• Has complied with the requirements of SS-1 as applicable.

• Signature for attendance of members and invitees and

evidence for service of notice is available

• Minutes were properly circulated, entered in Minute Book &

Signed by the Chairman with date

• RPT including Omnibus transactions has been reviewed

and approved by ACM

• All the mandatory items as specified for the ACM under CA

& LODR has been placed before the ACM and considered

• Quantative & Financial budget has been approved

Meetings – NR Committee

Check properly in relation to NRC Meetings:

• Appointment of all the directors and KMPs and

remuneration were approved by the NRC.

• Constitution of NRC as per CA and LODR

• Has complied with the requirement of SS-1.

• Signature for attendance of members and invitees and

evidence for service of notice is available

• Minutes were properly circulated, entered in Minute

Book & Signed by the Chairman with date

• All the mandatory items as specified for the NRC under

CA & LODR has been placed before the NRC and

considered

• Evaluation of the Board is made as per SEBI Circular

Meetings – CSR Committee

Check properly in relation to CSR Meetings:

• Constitution of CSR Committee

• CSR Policy has been approved by CSR Committee

• CSR Budget has been approved by the Committee

• CSR Project has been approved and monitored by

the CSR Committee

• CSR Report is approved by the Committee

• Has complied with the requirement of SS-1

• Signature for attendance of members and invitees

and evidence for service of notice is available

• Minutes were properly circulated, entered in Minute

Book & Signed by the Chairman with date

Deposits

Check properly:

• No Credit balance of sundry debtors exceeding 365 days

• No Credit balance of share application money exceeding 60

days and excess application money refunded within 15

days to the applicants after allotment of securities

• Unsecured loans taken from directors, their relatives and

members are in compliance with the exemption

requirements under the Companies Deposit Rules

• Company has obtained declaration that the amount given to

the Company are not from the borrowed sources

• Terms of repayment and rate of interest – In view of the

Insolvency & Bankruptcy Code 2016

• Disclosure for exempted deposit has been given in the

Board Report.

Other important compliancesCheck properly about :

• Managerial remuneration u/s 197 & Schedule V (For

Public Co.)

• Transfer of unpaid Dividend exceeding 7 years to

IEPF, if any

• Proposal relating to appointment of another Auditor in

rotation of existing auditors in 2017 AGM

• Tenure of WTD/MD/Independent & other Directors

• Updating of all the Statutory Registers

• Charges with the Register of Charge, Financial

Statements & the Index of Charges at website of MCA

• Website updation as per CA-2013 and SEBI (LODR)

Regulations, 2015

Matters to verify before

drafting of Notice of AGM

• Declaration of dividend, if any

• Directors liable to retire by rotation, if any

• Directors needs to be appointed u/s 160, if any

• Appointment and change in the terms and conditions of the

MD/WTD/M, if any

• Term of the appointment of the Statutory Auditors for

appointment/ratification of appointment at the AGM.

• Requirement for passing SR u/s 180 & 186, if any

• Requirement for passing SR u/s 188 and/or under SEBI

(LODR), if any

• Requirement for approval of remuneration of the Cost

Auditors, if any

Check Points Cross verification from :

- Corporate Governance Report filed to SEs Vs

Board Meeting, ACM, NRC, SHRC

- Website of MCA, BSE website,

* specifically for SEBI (PIT)

* Financial Results,

* SHP,

* Announcement of Price Sensitive information,

* Out come of BM & GM.

- Status of directors from MCA & Co. records

- Status of Charges on MCA, Financial Statement

- Website of the Company.

“Problems become opportunities,

when right people come together …”

Insolvency Professional under Insolvency And Bankruptcy Code, 2016

• IBC, 2016 has been assented by the President of India on 28th

May, 2016.

• All the matters of Insolvency and Bankruptcy of the Individuals,

Firms and Corporates are now under the purview of the IBC

• NCLT (Tribunal) for Companies, LLPs and Debt Recovery

Tribunal (DRT) for the Individuals, Partnership Firms will be the

adjudication authority.

• NCLAT and DRAT will be the appellate authority and final appeal

if any, will be made before the Supreme Court only

• No other Court in India would be having jurisdiction under the IBC

• Speedy resolution on Insolvency would be provided within 180

days plus maximum one time extension upto 90 days only

• Only Registered Insolvency Professionals with the IBBI will be

authorized to act as the Insolvency Professional

Insolvency Professional under Insolvency And Bankruptcy Code, 2016

Basic requirements to become Insolvency Professional

• He/She must be a member of the ICSI, ICAI, CMA, Advocate

with experience of not less than 10 years

• Must have passed the Limited Insolvency Examination of IBBI

conducted through the NSIM online basis;

• Must be registered with the Insolvency Professional Agency

(IPA) presently there are only 3 IPA, viz ICIA, ICAI and CMA by

application and payment of fee of Rs. 10,000 (for ICSI)

• Must be registered with the IBBI by application through the IPA

and payment of fee of Rs. 10,000

• Must be practicing CA, CS, CMA or Advocate

• Individual as well as firms/ Companies and LLP of majority of the

Partners/WTDs/ DPs may be registered as IP

Insolvency Professional under Insolvency And Bankruptcy Code, 2016

Appointment & Role of Insolvency Professional

• The Corporate Debtors, or Financial Creditors or Operational

Creditors need to propose name of the Interim IP along with his

consent in the Form 2 to the Tribunal

• Tribunal shall upon admission of the Application appoint Interim

IP within 14 days of registration of the application

• Interim IP shall be appointed for a period not exceeding 30

days by the Tribunal

• Interim IP shall exercise powers of the management and take

possession of assets of the Company;

• Powers of the Board of directors shall be suspended upon

appointment of Interim IP

• Interim IP shall issue public announcement within 3 days of his

appointment for inviting claims etc.

Insolvency Professional under Insolvency And Bankruptcy Code, 2016

Appointment & Role of Insolvency Professional

• Interim IP shall finalize the claim received by way of acceptance

or rejections as the case may be;

• Constitute the Committee of Creditors (of Financial Creditors)

• Submit report to the NCLT

• Appoint 2 Valuers for valuation of assets

• Prepare Information Memorandum and submit the same to the

Applicant

• Call meeting of the Committee of Creditors for various purposes

including appointment of the Insolvency Professional.

• Expenses on Interim Insolvency, Professional fee, application

fee, Public Announcement, etc. shall be paid by the Applicant

which may be approved and reimbursed by the Committee of

creditors

Thus,

Opportunities are

Unlimited …

It is just a matter of

Creativity, Confidence and

Communication …

…and also Perception

and Positive Thinking

So now, we need to

prepare ourselves

to create niche in

the emerging

scenario …

But merely optimism will

not do

optimism with Confidence

& Right Attitude will …

Now, Get, Set and Go………

CS (Dr.) D.K.Jain

Company Secretary, Indore